SB 863: Why Are Worker Advocates In Opposition?


Posted on 28 August 2012

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By Julius Young

Boxer & Gerson, Oakland, CA
Publisher Of WorkersCompZone.com Blog

Today the legislature is holding an informational hearing on SB 863, a comprehensive workers’ comp reform bill.

Although the bill has some good elements, has been improved from recent versions and although any progressive workers’ comp reform effort may involve some compromises, SB 863 has too many takeaways for workers and should be rejected.

Supporters of SB 863 originally touted that SB 863 would result in $1.4 billion in system savings for employers while delivering $740 million in increased workers benefits, a 2:1 ratio in favor of employers. The California Labor Federation has touted that the bill would result in savings, relieving economic pressures of increasing workers’ comp costs.

But as late as yesterday, California’s Workers Compensation Insurance Rating Bureau questioned the long term savings effect of SB 863, projecting that it might increase workers comp costs. This has raised concern among members of the business community.

But why would worker advocates be concerned about SB 863?
Consider these issues:

Workers Lose Medical Rights
Under SB 863, workers would lose their right to a face to face medical exam as part of an appeal of treatment denials.

Judges  Are Stripped Of Authority Over Medical Disputes
Workers comp judges would be stripped of ability to hear treatment denial appeals except under the most extreme circumstances.

Costly New Dispute Resolution System Is Added
Additional costs would be added to the system as a massive Independent Medical Review system would be put in place on top of the current utilization review system. Advocates for SB 863 have not produced detailed studies documenting the costs of an large IMR system and haw those costs would compare with the current system of face to face QME reviewers.

Cost Drivers Are Not Addressed
Despite studies showing that cost containment measures such as utilization review have been increasing “cost drivers” in the comp system, SB 863 does essentially nothing to control utilization review costs.

Benefits Likely Shifted From The More Disabled
SB 863 appears to shift benefit increases to less disabled workers rather than more disabled workers who by definition are likely to have higher earnings losses. SB 863 eliminates the concept of “diminished future earning capacity” from the Labor Code (a concept used in an important case known as Ogilvie), making it harder for workers with severe earnings losses to recoup fair awards.

Proving Disability Is Made More Difficult
SB 863 does increase monies paid for some percentages of disability but reduces the ability of workers to prove those levels of disability. For example, a 50% disability rating would receive more money under SB 863 than under current law but by eliminating the “diminished future earning capacity concept” and other criteria, SB 863 makes it less likely that the worker would be found 50% disabled. That’s one reason worker advocates have questioned the projections of supporters.

WCIRB Report Confirms Concerns About Accuracy Of Proponents’ Statistics
The recent WCIRB analysis seems to confirm these concerns. The report from the WCIRB’s chief actuary shows a decrease in permanent disability benefits of $130 million due to “elimination of the impact of the Ogilvie decision”. According to the WCIRB, that consists of an $80 million drop in benefits and an additional $50 million due to decreased claims filing. The WCIRB  also projected further decreases in PD payments due to elimination of consideration of sleep disorders, sexual dysfunction and psychiatric residuals of physical injuries.

The bottom line is that the WCIRB analysis raises major questions about the accuracy of projections of labor advocates who claim SB will deliver large increases to workers.

Transparency Has Been A Problem
Advocates of SB 863, including the Department of Industrial Relations, have failed to produce their own studies and data showing the basis for their projections. The DIR failed to voluntarily reveal information about a memo that questioned the constitutionality of the Independent Medical Review provision s of the bill.

Injured workers  suffered many losses under the Schwarzenegger-era SB 899.  Since that time workers have seen a large drop in permanent disability payments and treatment delays have led to massive complaints about the system.

It would be a terrible development if the legislature rushes into a “fix” for SB 899 that results in further takeaways for workers.

There are many areas in California’s works comp system that need attention.  Parts of SB 863 are a good start, but the bill needs more analysis, more work and should be rejected.

Let’s not have “foie gras” style California workers’ comp reform.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Starting in 1979, Julius Young has represented thousands of individuals who have sustained life-changing injuries or illnesses while on the job. A partner of Boxer&Gerson since 1988, he practices workers’ compensation and disability law in Oakland.

A very well stated position for rejecting this ill conceived legislation. There is a very long laundry list of severe problems with California workers comp...this bill does not address the vast majority of them...this bill is once again all about politics and disconnected special interest...SB 863 does not well serve the people's interest or the directly effected parties (injured workers).

Subject: Breaking News!!! Press Conf - Mon - 8/27/12 Sacramento

BREAKING NEWS!!!!!!!!!

URGENT ACTION NEEDED !!!

Politicians are pulling a procedural move to bypass a public hearing!!!

1) Mon 8/27/12 Press Conference schedule @ Capitol Hill

2) CALL Senators Kevin de Leon & Solorio & Governor Brown

Tell him to STOP Work Comp Reform, and that you oppose this change!

De Leon: 213-483-9300 - LA Office & 916-651-4022 - Sacramento Ofc
Solorio: 916-319-2069

I just got news that SB863 has been killed! Good job guys BUT the dirty politicians, Governor Brown's administration, BIG business, and BIG insurance is pressuring passage of ANY work comp reform bill! It is more important than ever to fight harder. I have been told that the senators are pushing for a procedural move to AVOID a public hearing! We are holding a press conference on Monday 8/27/2012 on the Capitol steps. PLEASE contact anyone you know who may be willing to join us, especially injured workers.

8/27/2012 Monday - Press Conference @ State Capitol

Meet at 9:45
At Hyatt Hotel lobby across State Capitol
Address: 1209 L Street, Sacramento; T: 916-443-1234
Join Jesse Ceniceros, President of Voters Injured at Work (wearing a red VIAW t-shirt)
why: it is very important to bring all the injured workers you know! They need to voice their experiences, and outrage against this bill.
The senate has made a procedural move to allow them to bypass a public hearing!!! The secret voting and lack of transparency continues!
We MSUT show up Monday to the cpaitol with our injured workers so that they legislators understand that they are hurting real people.
This may be our only chance to KILL the bill!!!!!

The Senate Labor & Industrial Relations Committee Chair, Ted Lieu, that was backing the bill has BACKED off. NOW, Senator De Leon has been asked to step up and find a dead bill, amend it in secret and propose it as a Work Comp reform bill!!!!!

Senator Kevin de Leon is from the 22nd District in our own turf!!!! He covers the following areas: City of Los Angeles, Alhambra, East Los Angeles, Florence-Graham, Maywood, San Marino, South Pasadena, Vernon, and Walnut Park.

If you know of anyone who lives in that area, conducts business in that area, or works in that area, you MUST MUST MUST call them now, email them this link and get them to call De Leon to STOP any work comp reform bill he is working on. THE LOUDER WE are the more they run! We can run them out of session, and stop this tragedy from depriving constitutional rights from all Californians! You will be fighting for yourself, your family, your friends, your co-workers, labor workers, minimum wage workers, and LATINO's!!! Lets take this ATTACK on our RIGHTS and throw it right back at them in their OWN BACKYARD.

www.stopsenatebill863.com

More info on
--

Arsineh Arakel, Esq.
ARAKEL & ASSOCIATES
11644 Atlantic Avenue
Lynwood, CA 90262
Office: (310) 637-4124
Facsimile: (310) 637-4123
Mobile: (818) 606-4343

Abogado Gomez stated above 8/28/2012: "I just got news that SB863 has been killed!"

Can you please provide your source/s and verify this information/statement..

I have heard/read nothing to confirm your claim that this bill has been "Killed"...this bill appears to still be in the state assembly (pending more modifications), very much alive, & could go to a vote without floor debate at any time..

I am a workers comp nurse..... This will definitely hurt the people who is really genuinely hurt during work hours.... Let us treat our patients and continue to serve our country as medical professionals

If you are an 1) injured worker 2) attorney 3) organization 4) physician 5) interpreter 6) service provider or 7) someone who is an employee and is interested to FIGHT SB863...contact me at stopsenatebill863@gmail.com.

I would like more information

We are all missing the point. The unions are selling out the injured workers because they have their own ADR programs. They think that everyone else should sacrifice for them so they can benefit from a hoped for improved economy and reduce pressure for employers to go non-union. In other words, let the non-union workers pay for their continued existence. The Governor is throwing this bone to business in the hope he can thwart a last minute attack by business on his tax initiative. We need to let the Governor know that if he signs this bill that his tax initiative is DOA with the voters. We need to forget about party affiliation and whether we are conservative or liberal and play a little hardball to defeat this sell out. Remember, the Republicans promoted SB 899 but the democrats voted for it with only 6 legislators voting against. This occurred because the democrats brought in the construction workers unions (many of which have provisions in their ADR contracts that prohibit the worker from having a lawyer) in the 11th hour to tell the democrats that there would be no down side to their voting for the bill. Ask yourself, why would unions have been for SB 899? Why would democrats have voted for such a regressive and punishing bill? Not much has changed. We need to reward our friends and punish our enemies. Nothing else works.

The problem with this bill is all in connotation versus reality. There is a widely accepted perception that "independent" equates to "unbiased". Unfortunately, that's not the case. When an insurance company is asked to use an independent utilization review or an independent bill review what that creates is a group of utilization review companies and bill review companies that already exist, that are essentially denial mills, just becoming larger denial mills in order to keep their contracts with the carrier. They will become beholden to the will of the carrier. Creating a standardized MPN programs do the same thing to the treating physicians. The treating physician will have to second guess every single treatment plan that exceeds conservative care in fear they will be dismissed from that carriers MPN.

If the reality exists that public hearings were side tracker, then that's the saving grace. California labor code 5307.4 sets specific criteria on how public hearings need to proceed when dealing with changes to workers compensation, including notifications and timelines that necessitate specific obligations. You can read the entire text of labor code 5307.4 here:

http://law.justia.com/codes/california/2011/lab/division-4/5300-5318/530...

Thank you for your time.

Kevin Garofalo

Coming from an individual that was forced into early retirement from being overworked, to the point of exhaustion, it seems this is what the claims adjuster is looking for - HELP with administrating these claims...I personally like all the reforms, sad that it has to happen all at once....adjusters are gonna go through more mental changes with this one. Great Job!

This is my first time i visit here and I found so many interesting stuff in your blog especially it's discussion, thank you.
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